The root of the term “wicked” may best be understood as “guilty.” They are guilty of being “wicked” on the inside — in their hearts and minds. It’s the default position for how they think.
And their “wicked” way of thinking will eventually show up as “sin” or “transgression.” Their thinking gets manifested in words and actions that “cross the line” and are contrary to the way things are supposed to be.
Guilty of wrong in thought, word and deed — not a pretty picture for them or anyone around them!
So it’s also not a surprise to hear that “the righteous will see their downfall.” In the end, those who’ve learned to see things as God does (“the righteous”) will clearly know that “wickedness” does not prevail.
I think that’s the message of this proverb. But I’d like to add a postscript.
The truth is, on a personal level, we all know something about the guilt of wickedness and the rebellion of sin. We also understand about our own inability to appropriately think and live up to God’s standard.
But the really Good News is that God — who’s not mentioned in this verse at all — already knew that! He understands our condition and struggles and even made provision for it!
That’s Who Jesus is and Why He came!